I think we've arranged a great deal with her... it's a 50/50 profit split where she provides the finances and we manage the entire project, from using our own guys to subbing out to other contractors if need be, to designing the final product to SELLING IT for NO COMMISSION!

Other investors and lenders like to see overall performance first (overall gross and net profit, operating expense, annual return in percentage etc).

Would investors still be interested in this and could there still be a profit margin or should I back out altogether?

So you’re building equity at $186/month, which you should include as profit.

If one partner puts in more money than the other, you could change ownership interests, you could treat it as a loan, you could reduce income/profits from the non-contributing partner until the contributing partner is paid, etc.You will want to discuss with each other who will be doing what management functions and whether that is worth anything to you both.

Partner with someone that will find a great cash flowing property, will manage it themselves, and split the profits at the end of the year. 

He wants to put his $200k profit down on a huge fancy home (to make his wife happy, I’m sure) and pay a mortgage while working a 9-5 the rest of his life.

You want to have control of your investment ensuring it is as profitable as can be.  

If there a "Legal Aid" non-profit group in your area maybe you could contact them for free help or contact a lawyer.In my State, I believe I could evict for illegal activity because my lease says that I can.One of the problems with illegal drugs is that the landlord could lose his property if someone is dealing there which is unfair, in my opinion, to the landlord. 

The way I’m looking at real estate is pretty simple, buy a property, rent it out for more money then the expense of owning the property is, make a profit.